Political uncertainty in Greece and possibility of
Greek euro exit weigh on financial markets.
EUR and stock markets lower and German bond yields at new record low. Greeks appear to be preparing for new
elections. ECB board member Asmussen raises topic of Greek euro exit. With a
light calendar focus will remain on the political situation in Greece.

Morning Briefing: Greece is the word–
BNYMellonWhilst the push for a more relaxed interpretation of the EU’s fiscal
compact may yet yield some success, Greece will struggle to obtain any
new flexibility

European markets are likely to reverse their
earlier session losses and open higher Wednesday ahead of a meeting today
between Alexis Tsipras of Greece’s Syriza party and
leaders of the two main Greek parties. A German bond auction is also in focus.

Newly revealed German government documents
reveal that many in Helmut Kohl's Chancellery had deep doubts about a European
common currency when it was introduced in 1998. First and foremost, experts
pointed to Italy as being the euro's weak link. The early shortcomings have yet to be
corrected.

Policymakers have been responsive and
flexible. Skeptics have consistently
underestimated the willingness and resourcefulness of the relevant
institutions.

Spain Appears Unsure What A "Bank Bailout" Means – ZHSo, in a nutshell: the Spanish banks got
EUR352 billion (via LTRO and loan repayment) and are left with only EUR80
billion (after deposit outflows and sovereign reach-arounds)

I have repeatedly argued that Greece and the troika will
choose to part ways in an amicable divorce as early as next year. The current
political situation in Greece means that the
divorce may come much sooner, and the split could get very ugly.